Bolivia on a Tight Ropeby Benjamin Dangl
www.dissidentvoice.org
June 8, 2005First Published in UpsideDownWorld.org

On
June 6th 2005, after months of steady road blockades and protests
demanding the nationalization of the country’s natural gas reserves,
President Carlos Mesa offered his resignation to congress, explaining he
was incapable of presiding over such a tumultuous country. This was one of
many climactic points in a series of popular uprisings over the destiny of
the second largest gas reserves in South America. At this writing, the
fate of the gas, and the geopolitical future of the country, is still very
much in question.

A Recent History of Division

Bolivia’s reserves
constitute an estimated 1.5 trillion cubic meters of gas, which at current
market prices, are worth more than US$1.5 billion. The unpopular
ex-President Gonzalo Sanchez de Lozada, commonly referred to as “Goni” in
Bolivia, pushed to privatize the nation’s gas reserves in a deal with
foreign companies such as British Gas, Exxon-Mobil and Spain’s Repsol in
2003. Under the deal, the Bolivian government was to receive a meager 18%
of revenues. This percentage struck a raw chord with many Bolivians. For
centuries, foreign companies had been exploiting the nation’s natural
resources such as coal, copper and tin, making enormous profits while
Latin America’s second poorest country struggled on. In recent gas-related
uprisings, many Bolivians have been trying to make sure history didn’t
repeat itself.

Outraged by Goni’s
privatization plan, activists took to the streets in what has been called
Bolivia’s first “Gas War.” From September to October of 2003, protests,
road blockades and strikes paralyzed the country. Often without sufficient
political representation, protest groups have become adept at directing
political and media attention to their demands by shutting down the
economy with road blockades and strikes. Protesters demanded that the
natural gas reserves be nationalized, and run by the government so that
profits from the business could go to poorer sectors of society, helping
to build much-needed hospitals, roads and schools.

The complicating
factor in this equation is that the Bolivian government is too poor and
dependent on foreign aid to nationalize the gas industry itself. What
could happen however is that congress could vote to take possession of
existing investments set up by foreign corporations. This move could
easily isolate Bolivia in the international community and create outrage
among foreign investors. Yet this is what many protesting sectors have
continued to demand.

In 2003, protesters
also demanded the resignation of President Sanchez de Lozada, who had
continually channeled state resources toward foreign investors and
international donors instead of social programs to address the needs of
Bolivian people. Sanchez de Lozada’s heavy-handed protest control tactics
also left nearly sixty dead in the month-long Gas War, the large majority
of them protesters. At the end of the conflict, Sanchez de Lozada fled
the country, leaving the administration in the hands of Vice President
Carlos Mesa.

Mesa knew that if he
were to survive the political climate, he would have to concede to some of
the diverse demands of the protesting sectors. Among his promises were
plans for a national referendum on the gas exportation issue and justice
for the victims of the 2003 Gas War.

On July 18th, 2004
the referendum took place. Voters were to choose yes or no to five
questions including whether to repeal Sanchez de Lozada’s gas exportation
plan, increase revenue with a new plan, use the gas as a strategic way to
gain access to the sea from Chile, and use most of the profits from the
exportation plan for the development of schools, hospitals, roads and
jobs. Unfortunately for Bolivian protest groups, the referendum did not
include the nationalization of the gas as an option.

Many voters did not
understand the convoluted wording of the questions, which were not only
pointed towards a “yes” vote, but also left open opportunities for
corporate exploitation of the gas. Citizens were also reportedly forced
into voting by a harsh new law that called for the imprisonment of any
person who refused to participate in the referendum.

The controversial
referendum led to divisions among activist leaders in Bolivia. Jamie
Solares from the Bolivian Worker’s Union and Felipe Quispe, the director
of the Bolivian Farm Workers Federation, led blockades and protests
against the referendum, but were not able to generate enough grassroots
support to stop or impede the voting. Congressman Evo Morales, leader of
the Movement Toward Socialism Party (MAS) and a major coca farmers’ union,
supported the referendum. Some viewed Morales’ endorsement as a strategic
move to gain urban middle support for a presidential bid in the next
election.

After the polls
closed on July 18th, it was announced that seventy-five percent of the
voters said “yes” to all five questions. Yet for months, gridlock in
congress, pressure from foreign investors and protesting groups postponed
any major decisions on what to do with the gas.

The violence of the
2003 conflict still hasn’t been fully investigated, and members of
Bolivia’s security forces have not been charged. However, Mesa has
differed from his predecessor in one significant way: he has refused to
call for the use of lethal security force to break up the many protests
and road blockades. In the year and half that Mesa has been in office,
though confrontations between protesters and security forces have resulted
in injuries, no deaths have been reported.

Gas War: 2005

In March of 2005,
protest groups made up of unions, farmers, civil society organizations and
students, were tired of waiting for the government to nationalize the gas.
Through both independent and coordinated efforts, protesters marched,
blockaded vital highways and shut down four oilfields near the central
city of Cochabamba.

On March 6, after
facing an estimated 800 protests during his term in office, Mesa stated
that the country had become “ungovernable” and offered his resignation. He
blamed Evo Morales for the chaos in the country and used the resignation
announcement as a threat to hand power over to the President of the
Parliament, Hormando Vaca Diez. Due to his ties to foreign investors and
the main right-wing party in government, Vaca Diez was highly unpopular
with Bolivian leftists and was likely to respond more violently to
protests than Mesa.

Mesa was hoping the
gesture, which many called a plea for sympathy, would force the left to
back off. Yet not only was Mesa’s resignation rejected by congress, but
his announcement backfired. During Mesa’s show of weakness, diverse
protest groups led by Morales, Quispe and Solares came together to
re-launch a past protest front known as the People’s General Staff. The
group, formed to unite the country’s social movements, called for
continued strikes and demanded that governmental royalties from the sale
of the gas be raised to a minimum of 50%.

On May 17th, 2005,
the Bolivian congress passed a gas law which set royalties at 32%, falling
short of the protesters demands. This set off another round of marches and
road blockades. The legislation also agitated foreign investors, who
claimed it gave far too much control to the government. The law increased
taxes for foreign companies and stated that indigenous groups would have
to be consulted about further use of gas in their areas and would receive
compensation for the use of their land. Many foreign investors had been
pumping money into Bolivia’s gas industry since 1996 and felt that the new
law was confiscating their investments. Some threatened to sue the
Bolivian government in international courts.

Jeffrey Webber
published an article in ZNet, which quoted the US Treasury
Department’s Assistant Secretary of International Affairs, Randal Quarles,
as saying that, if the new gas law were to go into effect, it would be a
“sure thing that the first measure would be the suspension of investments,
at minimum while Bolivia continues this uncertainty.” Quarles also
suggested that the law might influence the amount of financial support
that organizations such as the International Monetary Fund and the World
Bank offer to the Bolivian government.

The day before the law was passed, 100,000
protesters, primarily from El Alto, a working class community near La Paz,
the country’s capital, rallied outside parliament demanding Mesa’s
resignation. In the proceeding days, other sectors joined the El Alto
protesters. The La Paz teachers’ union called a strike, peasant unions
across the country organized road blockades, and the National Congress of
the Miners’ Union also began marching in La Paz. The MAS party organized a
massive march from the city of Cochabamba to La Paz, a distance of 190
kilometers.

In an article on
ZNet, Nick Buxton quotes a miner named Iriaro, who had traveled six
hours to join protests in La Paz, as saying, “People are suffering to get
here as they have so little money. But I decided to come because we need
to reclaim our natural resources. We have been robbed for centuries and
our government is robbing us again.”

Not all protesters shared the same goals.
Evo Morales said that Bolivia should receive 50% of the royalties from the
sale of the gas; a demand that had been previously supported by
protesters, but, by this point, was viewed by many as too moderate. As
the perhaps strongest leftist presidential candidate, Morales and his
positions are often highly scrutinized. In an article in CounterPunch,
Forrest Hylton explained that “Morales poses as the defender of democracy
in hopes of winning over the urban middle class…Though the U.S. Embassy,
the weak and divided Bolivian elite, and the London Economist see
Morales as a wolf in sheep’s clothing, a strategic radical disguised as a
tactical moderate, in rhetoric and fact Morales is the strongest defender
of Bolivian democracy as presently configured. Neither he nor MAS want to
see the constitutional order unravel, as both have had their sights set on
the 2007 elections since 2002, when Morales nearly won the presidential
race.”

By May 24, tens of
thousands of protesters had again descended into La Paz from El Alto. They
were met with rubber bullets and tear gas from security forces. Six
protesters were reportedly injured in the clashes. Road blockades were set
up on main roads across the country, shutting down routes to La Paz, the
nearby international airport, and roads to the borders with Peru and
Chile.

On June 2nd, as a
last ditch effort, Mesa announced plans to re-write the constitution in a
national assembly. With such an assembly, Mesa hoped to calm the protests
by offering marginalized indigenous people a larger voice in the
government. Under his decree, members to the constitutional assembly would
be elected on October 16, 2005. According to a June 3rd report by the
AFP News Service, Evo Morales, stating that Mesa’s proposal could
easily be rejected by congress, said it had “good intentions, but is
unconstitutional…a new show put on by the government [to demobilize the
protests].”

Protesters were not
satisfied with Mesa’s proposal, as it didn’t offer an immediate response
to their demands for nationalization of the country’s gas. Protest groups
pledged to continue road blockades and marches until the gas was
nationalized and plans for the constitutional assembly were passed by
congress.

Mesa also proposed a
referendum on the autonomy of resource-rich areas in Bolivia, such as the
province of Santa Cruz, where much of Bolivian gas is located. There is a
strong drive in this region to privatize the gas. Protest groups are
deeply against right-wing demands for such autonomy, as it would thwart
any plans for full nationalization.

On June 6th, after
another full day of protest and road blockades, Mesa again offered his
resignation to congress. “This is as far as I can go,” Mesa stated in a
televised address. The Andean Information Network reported that
Mesa also said that he had done his best, and that he asked Bolivians for
forgiveness if he shared responsibility for the profound political crisis
that was gripping the nation. Although the MAS party demanded Mesa’s
resignation, it was not a key demand of many groups; most primarily
advocated for the nationalization of the gas. For many protesters, the
issue wasn’t who was President; it was who was in control of the nation’s
gas. As such, Mesa’s resignation is unlikely to offer a solution to
Bolivia’s crisis.

Promising not to
repeat the mistakes of his predecessor, Mesa did not call upon the use of
lethal force by police to quell protests. However, should Mesa’s
resignation be accepted, the presidency would then go to Vaca Diez, who
has often advocated the use of force to stop the protests. During the
Sanchez de Lozada administration such crackdowns only fueled national
discontent.

Even before Mesa
offered his resignation, Vaca Diez said that the idea of having early
elections is “gaining momentum as a way out of the problem.” Morales also
told reporters that holding early elections “is the only way we will find
a political solution.” If early presidential elections do take place,
Morales may have a solid chance of winning. He lost to Sanchez de Lozada
in 2002 by less than 2% of the vote. Whoever ends up becoming president
will continue to face similar pressure from foreign investors,
international donors and a largely discontented majority of citizens.

As the conflict has
proven so far, only full nationalization of the gas is likely to satisfy
protesters. Marches, blockades and strikes are expected to continue across
the country. Meanwhile, the second largest natural gas reserves on the
continent remain in the ground.

Benjamin Dangl worked at the Andean
Information Network in Bolivia in 2003. He is the editor of
www.UpsideDownWorld.org, an online magazine about activism and
politics in South America, where this article first appeared. Contact:
Ben@upsidedownworld.org. Thanks to April Howard for editorial help
with this article.